BSP’s view on the OFW remittance decline, misleading — Migrante

Reacting to the 4.5 % OFW remittance decline in June, the Bangko Sentral ng Pilipinas (BSP) pointed to the repatriation of 4,149 Filipinos from UAE, Saudi Arabia and Kuwait in the first two months of the year. Migrante sees this ascription as sketchy and misleading.


(Photo: from the movie “Remittance”)

What the BSP does not tell us is that the real reason for the decline is the on-going economic crisis in the Middle East brought forth by the armed conflict, political squabbles and trade wars among countries in the region. Saudi’s servile stance to US imperialist interests dragged it to a costly war against Yemen which has been raging for 3 years as well as its financial involvement in the US-led armed conflict in Syria. Adding insult to injury is Saudi’s diplomatic rancour with Canada.

Considering all countries where Filipino workers are deployed, the growth rate in overall personal remittances has slumped to its slowest since 2010.  From an average growth rate of 7% in the period of 2010 to 2015, it went down to 4.4 % in 2016, slightly rose to 5.3% in 2017 (World Bank), before plunging to 2.8% in 2018. These glaring figures tell us that the downturn has been trending in the last 2 and half years as compared to the inflow surge from 2010 to 2015 where 2014 was the highest at 8.6 %.

Filipino workers in Saudi are hard-hit by this fallout. Cash transfers from the Arab country fell to 4.6% in 2017. The last time it reached this level was during the Asian financial crisis and in the 2008 global crisis. The imposition of value added tax in Saudi also led to price hikes in goods and services. At an increasing rate, many establishments are also closing down.

As Saudi employers writhe from these economic repercussions, cases of delayed, decreasing or unpaid salaries have worsened. In every region, the number of stranded OFWs soared to 500. This number doesn’t even account for those who have sought shelter from their relatives and friends. Their troubles escalate as Saudi’s expat dependent tax is expected to rise in the coming years.

The Philippine Overseas Labor Office (POLO) has failed miserably in addressing the labour cases resulting from the crisis. Many OFWs in Saudi are struggling to obtain their end-of-service benefits. Worse, POLO is even prodding troubled OFWs to just content themselves with meagre amounts towing on the ridiculous line that it is more preferable than receiving nothing at all.

As part of the Saudization plan, the labor ministry of Saudi has intensified its crackdown on illegal residents and workers. Many of these workers have actually entered Saudi as legal workers but ended up in complicated labor situations due to contract violations of employers. Saudization is also targeting Filipino professionals and those in managerial positions.

One of the features of Saudization is visa restrictions to labour exporting countries and the setting up of block positions for locals. The effect is the confinement of migrants to dirty, difficult and dangerous low-paying occupations entailing a hefty impact on cash flows back to their home countries.

For now, the Saudi crackdown has mostly affected Yemenis and Ethiopians. Nevertheless, security issues alarm Filipinos as the threat of zoning or house-to-house crackdown is looming.  The absence of a more comprehensive repatriation and reintegration plan underlines the incompetence of the Duterte regime. In the same manner as that of Cory and Erap, the deployment ban posturing of Duterte was short-lived.

The Philippines’ record high inflation rate caused by Duterte’s TRAIN law and widespread unemployment will expose newly-deployed Filipinos in dire straits as they scour for additional cash to be sent back home. We can expect that the Duterte regime will exacerbate its labor export program to cushion the impact of the Middle East crisis.



Reference: Arman Hernando, Spokesperson, Migrante International, 0932-509-50-54